Will Big Tech emerge as the big winner in the coronacrisis? Not so fast.


Big technology companies are getting a break from the “techlash,” but this does not mean that the monopolists are permanently off the hook. The crisis has highlighted privacy and security concerns and well as subpar labor standards in the industry. Social media face additional scrutiny for how they deal with COVID-19 related disinformation.

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The actual Silicon Valley may be shut down under California’s shelter in place orders, but virtually it’s all around us. The big technology companies are playing an oversized role in our lives as we are fighting the spread of COVID-19, the disease caused by the novel coronavirus. During this frightening pandemic, these global companies offer solutions for individuals, communities and societies as they struggle to cope with social isolation.

Since the fear of contagion has forced entire nations into digital home offices, employees around the world work in Microsoft Teams and participate in Zoom conferences while their children attend school through Google Classroom. Facebook and its subsidiaries Instagram and WhatsApp are replacing physical meetings with family, friends and even neighbors. Netflix and Youtube are in such high demand that the companies have reduced the quality of their streamed videos to ease the strain on broadband networks in the EU. And those Amazon packages keep arriving at the door step at a time when every trip to the local grocery store is a potential health risk.

Big Tech could emerge from the coronavirus crisis stronger than before, predicts the New York Times. At a time when brick-and-mortar stores are laying off employees, Amazon has hired 100,000 to meet the rising online order demand for items from medicines, dog food and toilet paper to books and clothing. Amidst a crashing stock market, analysts recommend investing in “stay at home stocks.” These include the known shopping and streaming services, but also the workout platform Peloton. The travel and gig economy, from Expedia to Lyft and Uber, stands out as the only obvious loser in this big tech stimulus vehicle that is COVID-19.

Google and Facebook to the rescue

The crisis is also an opportunity for the bosses of these companies to brush up their image. “We need more Googles,” said California’s governor Gavin Newsom after Sundar Pichai, CEO of Google parent Alphabet, announced that the company would donate 4,000 Chrome Books to students and offer 100,000 free Wi-Fi hotspots to rural households in the state. Google is giving free advertising space to the World Health Organization and small businesses. The company has also built a screening app for coronavirus symptoms. Facebook has pledged 100 million USD to help small businesses and another 100 million to support struggling local news media. Both Google and Facebook are donating sizeable amounts of respirator masks to hospitals.

As the coronavirus crisis deepened in March, Western societies hit the pause button on the “techlash” that had dominated the news cycle in 2019. The public outrage over tech monopolies abusing their market power and disrespecting users’ privacy gave way to more immediate concerns such as connecting with colleagues and schools from home and being able to stock up on supplies without leaving the house. In polls in the United States and European countries, large majorities said that they were willing to sacrifice privacy rights to government efforts to monitor the spread of the epidemic by sharing mobile location data or using tracking apps.

Zoom is the new privacy “problem child”

Yet, as of early April, there are signs that the acceptance of state surveillance in times of a national emergency does not mean that citizens are willing to give companies a free pass on privacy. The opposite is happening to the video conferencing app Zoom, which has surged in popularity as employers were setting up the infrastructure for a new stay-at-home workforce. Over the past weeks, security experts and digital rights activists have turned up the heat on the company by alerting the public to the service’s past and present flaws, such as the lack of end-to-end encryption of video calls or incidents in which cameras were hacked. The FBI has warned schools of the service after unwelcome participants had gained access to classroom meetings, a practice now called “Zoombombing.” The company is being sued in California and probed by New York’s top prosecutor over reports that it disclosed personal data to Facebook without users’ consent.

Zoom may have overtaken Facebook as the tech industry’s new “problem child” when it comes to privacy. But there is another issue that keeps social media platforms in the spotlight during the current crisis. Facebook, Google and Twitter have struggled to deal with politically motivated disinformation campaigns – now they are facing a coronavirus “infodemic.” After a lag in catching up, the platforms are now moving aggressively to eliminate false information about COVID-19. Not sparing even its most prominent users, Twitter has removed tweets from Trump adviser Rudy Giuliani and Brazilian president Jair Bolsonaro.

Facebook’s new disinformation headache

By trying to be on the safe side, the platforms risk overshooting in the other direction. Over the past weeks, there have been many complaints about censorship of legitimate content. After Facebook had to send its human content moderators home, algorithms are in charge of policing the platform, sometimes yielding “false positives,” as CEO Mark Zuckerberg had to admit. The moral dilemma has been a stark reminder that the hot-button issues surrounding the regulation of platform liability for fake news, hate speech or misinformation are far from resolved.

Compared to the image issues haunting the communication platforms - let alone the expected loss of advertisement revenue for Facebook and Google amidst a deepening economic crisis – make Amazon look like a more solid winning bet among the “stay-at-home stocks.” The online retail giant is on an almost unrivalled expansion trail (Walmart is also doing pretty well in the United States) as consumers look to its deliveries as one of the few remaining reliable sources of supply for household goods and even groceries.

Spotlight on Amazon’s labor practices

Yet the company also has growing image problems. The company raised hourly wages for its warehouse workers and promised paid sick leave for those who test positive for COVID-19 or have to go into quarantine, but this has not put unions and workers at ease. Across the United States, workers at Amazon facilities (and at the Amazon-owned Whole Foods supermarkets) have staged protests against their employer. They claim that the company had failed to clean the facilities and to notify co-workers of cases. By the end of March, employees in at least 21 Amazon packaging and shipping facilities had tested positive for the coronavirus.

The future may not be as rosy for Amazon as some analysts predict. The increase in sales could be offset by the higher labor costs, especially in light of growing calls to extend sick leave policies beyond the crisis. On the other side, consumers may start looking for alternatives, if not during, then after the pandemic. Already, local stores in many US cities are starting to appeal to neighborhood solidarity with some success. New York Times editorial writer Greg Bensinger is looking beyond the current crisis when he warns that Big Tech should not be let off the hook: “Regulators and elected officials should not lose sight of the dangers of monopoly power falling into the hands of the fortunate few that survive the coronavirus fallout.”

Re-published in English from the web-site of Heinrich Boell Foundation-Brussels Office.